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Politicians irked by more car scrapping premium fraud

DDP/The Local · 6 Aug 2009, 09:05

Published: 06 Aug 2009 09:05 GMT+02:00

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The BDK criminal investigative alliance reported on Wednesday that up to 50,000 cars have been illegally sold to places like Africa and Eastern Europe instead of being scrapped as agreed.

The popular Abwrackprämie, or car scrapping premium, was part of Germany’s second stimulus plan and gives €2,500 ($3,500) to those who junk a car that is at least nine years old for a new one. The measure has boosted car sales significantly, but reports of fraud are on the rise.

While there is no concrete data for such incidences in Germany, BDK leader Winfried Albishausen told broadcaster ARD on Thursday that his organisation has logged some 200 “coincidental finds” in the port city of Hamburg and in the state of Baden-Württemberg. Selling the cars abroad is an easy way for criminals to make money because there is low risk for being caught, Albishausen said.

Finance Minister Peer Steinbrück has already said the government should look into the misuse of the funds.

Meanwhile, transport policy expert for the pro-business Free Democrats Patrick Döring told daily Bild on Thursday that the government should begin a special commission to stop the fraud.

“Customs, criminal investigators and the Federal Office of Economics and Export Control (Bafa) must conduct more spot checks at scrap merchants,” he said.

Head of the Christian Social Union parliamentary party group, Hans-Peter Friedrich, also called for stricter control on the government funds.

“Those who take part in fraud should know they will be followed without mercy,” he told Bild.

Story continues below…

Last month reports surfaced that fraudulent claims on scrap cars from Germany have gleaned millions of euros in the Netherlands, and some of the vehicles are coming from the popular Abwrackprämie.

The car scrapping premium began on February 20 as part of the government’s attempt to stimulate growth after the financial crisis. It was designed to encourage used-car buyers to add their old cars to the scrap heap for new, cleaner-burning autos.

In early March German officials changed the rules for the scrap premium due to fraud because some people were selling their old cars instead of scrapping them. Those who apply for the premium must now provide the original vehicle registration for the scrapped car instead of just a photocopy.

DDP/The Local (news@thelocal.de)

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